Demand for Higher-Yielding Assets Falls, Driving Aussie Down

The Australian dollar plummeted against its U.S. counterpart today after the U.S. stocks went down as the demand for the higher-yielding assets fell, driven down as the Goldman Sachs Group Inc. was sued for the fraud.

The U.S. Securities and Exchange Commission charged the Goldman Sachs today, saying that the company and one of its vice presidents were deceiving the investors by omitting and misstating crucial facts about the financial product tied to subprime mortgages. The Aussie dropped also as China increased minimum mortgage rates after voicing its intention to subdue speculation as the property prices went up.

The experts say that the news about Goldman are hurting the risk sentiment, making the investors shun the riskier higher-yielding assets. The China’s President Hu Jintao said that China will proceed with the floating exchange rate mechanism gradually.

AUD/USD closed today at 0.9251 after opening at 0.9344. AUD/JPY closed at 85.21 after it opened at 86.91

If you have any questions, comments or opinions regarding the Australian Dollar,
feel free to post them using the commentary form below.